Which of the following best describes a cartel?
a. A group of cooperating oligopolists that jointly reduce output and raise price in imitation of a monopolist. When entry is very costly, these high prices can persist.
b. A group of monopolistically competitive firms that jointly reduce output and raise price in imitation of a monopolist. When entry is very costly, these high prices can persist.
c. A monopolist that reduces output and raises price. When entry is very costly, these high prices can persist.
d. A group of identical non-cooperative oligopolists that is able to reproduce a monopoly equilibrium through price rivalry.
a
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Refer to the above production possibilities curves. Curve (a) is the current curve for the economy. Given production possibilities curve (a), point N suggests that the economy is:
A. using its available resources inefficiently. B. attaining full employment but not full production. C. attaining both full employment and full production. D. attaining full production but not full employment.
Many people believe that the supply and demand for regulation in an industry often results in the creation of a powerful coalition group controlling the regulatory body. That powerful group often comprises of executives from the same industry that is supposed to be regulated. This is called:
A. capturing. B. internalization of externalities. C. adverse selection. D. free-riding.